Agenda and minutes

An apology for absence was received on behalf of Councillor M Aaron, Councillor P Murphy and Councillor B Tebbutt.

Councillor McKenzie welcomed attendees to the meeting acknowledging the fact that Councillor Ian Corbett was the newly appointed Member for London Borough of Newham in place of Councillor Pat Sheekey.

We have agreed the Minutes of our meeting held on 24 November 2008.

The Finance Director set out the key issues of the report and it was important to take a 2/3 year view of strategies and service delivery.  He highlighted the budget issues including use of reserves to bring down the levy increase to 6.5%, various risks, pressures on the Authority and the necessity to balance strategy and prudence.

Issues of particular mention:-

• a general rise in the cost of waste disposal including higher taxation (eg £8 per tonne increase in landfill tax each of the next two years);
• the need to hold a reasonable level of reserves against foreseeable contract cost increases and against operational risks; and
• inflation increases.

The Finance Director also explained the position in respect of ELWA’s lending.

We have considered the report concerning the estimates and the levy for 2009/10 and the underlying cost increases, legal background and levy apportionment, together with the particular issues that apply.  We have also considered the issues relating to contingencies and reserves, including the risk analysis.

We have agreed:

(i)  the revised estimates for 2008/09, totalling £43,979,000;

(ii)  the revenue estimates for 2009/10 totalling £47,888,000 excluding contribution from reserves;

(iii)  the adoption of new rates for commercial and industrial waste and disposal credits for abandoned vehicles for 2009/10 as follows:-

Commercial and Industrial Waste – recyclable  £70.00 per tonne

Commercial and Industrial Waste – other  £88.00 per tonne

(iv)  the utilisation of the PFI Contract Reserve of £6,949,000 for 2009/10;

(v)  a Contingency Reserve of £300,000 for 2009/10;

(vi)  a contribution from Revenue Reserves of £2,279,000;

(vii)  the levy basis for 2009/10 in the sum of £38,660,000;

(viii)  the policy on Reserves and associated criteria for use in accordance with paragraphs 10 to 13 of the report; and

(ix)  continuance of existing arrangements for the payment of the levy and funding of Constituent Councils in 2009/10.

The Finance Director thanked colleagues in the Constituent Councils for their co-operation in setting the Levy.

We have received and noted the above report and the Finance Director’s comments that the previous year had been exceptional for money and property markets.  He added that procedures had been strictly adhered to and no major issues had arisen during the auditors review.  A more short term strategy for lending had been adopted.  We have agreed the Treasury Management Strategy and Policy Statement, the Prudential Indicators for Treasury Management, the Annual Investment Strategy and the Prudential Indicators for capital expenditure as set out in Appendices A to E of the report.

We have received the Executive Director’s report and appendices, together with commentary on updating the strategic risks and operation risks registers.  We have noted the Risk Strategy, approved the updated Strategic Risks and Operational Risks registers, noted the Net Risk Matrix and agreed to review the position annually.  It was explained that the assessed operational risks associated with the closed landfill site had been increased as a result of a recent spate of break-ins and theft.

We have received the Assistant Executive Director’s report and appendices providing us with details on the monitoring, outcomes and actions taken with regards to the management of the IWMS contract for the period of December 2008.

We have received commentary on and noted the ongoing and additional onsite monitoring by ELWA officers as set out in the report, that there were reliability difficulties with the orange bag separation system, unfavourable market conditions impacted on materials being placed with re-processors and that financial penalties had been levied for operational non-conformances.   

We have noted the recommendations.

We have received the Assistant Executive Director’s report and Appendix together with commentary on the performance of Joint Waste Management Strategy and development of waste and recycling improvement initiatives and trials related to it for the period to December 2008.  We have been advised that all boroughs are improving in relation to national performance indicators NI191 and NI192, waste arising fell well below projected figures and LATS allowances continued to be banked. 

We have noted the overall reduction in waste arising and the positive impact on NI191 for the Boroughs, the general implications of the Climate Change Act and the Batteries Directive, noted the current situation regarding commodity markets.

We briefly discussed whether the Constituent Councils could consider a recycling scheme that actively involved children collecting small batteries and depositing them in collection boxes at their schools.

Appendix D to this item is included in the private section as Agenda Item 16.

Councillor Weinberg has declared an interest in this and the next item and we have agreed that the meeting can continue in his presence.

We have noted the main commentary on the ABSDP 2009/10, the revised Operational and Waste Flow summaries and the financial costs set out in the Appendices, together with the tabled confidential letter from Shanks, dated 27.01.08 (received 29.01.09).  We have discussed at length the implications for and against approval of the revised ABSDP as well as the possibility of approval with a caveat.  Concerns were raised about the Contractor’s ability to reach recycling and composting targets, the continued difficulty related to the new orange bag Mrf at Jenkins Lane and in finding outlets for lower quality recyclates.

We have agreed to approve the revised ABSDP and asked for a report from Shanks in three months’ time on recycling performances achieved in that period. We have asked the Board to take this matter forward.  We have noted that other reports on the agenda deal with related issues including longer term service delivery plans and levy implications for 2009/10.

We have received the Assistant Executive Director’s report and Appendix together with commentary on strategic issues in respect of the medium term development of the IWMS Contract.  He spoke of the obligation to agree the service delivery plan for the 5 year period commencing 1st April 2010 and the need to enhance the infrastructure for improved recycling and diversion from landfill in the future.  He informed us of recommended policy changes, the joint waste planning process taking place between ELWA and the Constituent Councils that will be supported by London Remade at a cost of £34,000 and negotiations with the Contractor for the closure of the optibag systems.  We considered whether the Constituent Councils should, separately from ELWA, discuss their waste plans but agreed that London Remade work should continue in any event.

We have agreed the following recommendations:

(i)  that a working group, under the Directors of Environment of the four Boroughs, consider the possible operational implications and timetabling of a strategic move to the separate collection of orange bags, and consequential closure of the optibag units at Frog Island and Jenkins Lane;

(ii)  subject to the outcome of (i) above, that the contractor’s proposal to transfer optibag closure savings to the Authority is accepted in principle and that the transitional financial arrangements proposed in the report are agreed, in principle, in respect of the application of the optibag savings to support additional Borough costs;

(iii)  that subject to an improvement in performance in the interim period, more negotiations take place with the Contractor during 2009 to inform the development of the 5 year Service Development Plan for consideration in the Autumn of 2009, subject to progress reports to each Authority Meeting; and

(iv)  that expenditure of £34,000 is approved for the facilitation of a joint 5 year waste plan to build upon the conclusions of the Members Workshop in October 2008 facilitated by London Remade.

In the light of his appointment by the Authority as a Director of ELWA Limited, Councillor Weinberg declared a non-pecuniary interest in the next item and was excused from the remainder of the meeting.

We have received the Executive Director’s report and Appendices, together with commentary, on ELWA Limited’s Board meeting of 10 December 2008 and the requirements of Sections 175 to 177 of the Companies Act from 1st October 2008 in respect of conflict of interests.  The legislation allows a director to continue to act provided the relevant Board has been notified of the conflicts that might arise and provided the relevant Board has the power to approve the conflicts. 

We have noted the Minutes of the meeting dated 15 October, and the main points of discussion at the 10 December 2008 meeting of the ELWA Ltd Board and we have authorised the Clerk of the Authority to sign the Resolution as circulated. The Authority’s approval was required because ELWA is one of the two shareholders in ELWA Ltd and it is the shareholders of a company that must enable the Board of the Company to approve potentially conflicting interests.

We have received the Assistant Executive Director’s report on the current financial and operational position of the joint venture company for the extraction of landfill gas and conversion to energy at ELWA’s Aveley 1 site.  He reported that gas production had fallen producing 16% less electricity over the year.  He also reported that vandalism and plant failure had resulted in a projected £22,000 loss rather than a £4,000 operating profit.  We have considered security and trespasser accident liability, long term gas management, the possibility of winding up the company and removal of the electricity generation equipment and possible disposal of the site.  We have asked officers to look into the possibility of selling the land.

We have noted the uncertainties concerning the future of AML and the management of the Aveley 1 site and agreed to receive further reports during 2010.

We have received and noted the Executive Director’s report and Outline Specification relating to the arrangements for the governance review and seeking approval to consultants’ fees as reported.  We have approved the arrangements for conducting the review by specialist consultants, agreed to make arrangements, via the ELWA office, for interviews with the consultants and to receive a further report at our next meeting.

We have resolved to exclude the public and press from the remainder of the meeting by reason of the nature of the business to be discussed which included information exempt from publication by virtue of paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972 (as amended).

We have considered the Executive Director’s report and Appendices and approved the recommendations as set out in that report.

(* Part of this item was considered after a resolution had been passed to exclude the public and press from the remainder of the meeting as the information included in the detailed financial proposals of Shanks.east London in respect of  the IWMS Contract which is except from publication by virtue of paragraph 3 of Part I of Schedule 12A to the Local Government Act 1972 as amended.)

Chair: ………………………………..

Dated:  ………………………………..